Searching a dream home is not less than a herculean task. Dream home loan remains very much in the mind of the people as it gives them the assurance of their stay for a lifetime and the same assurance is not possible with a rented accommodation.
Swati is a single woman in the big city. She has been living in a rented house for 5 years but now she finally planned to have his own home. She plans to apply for a home loan to buy her dream house. She would have found it difficult to get a loan. If she had planned it a few decades ago as women-owned SMEs have a 250% higher chance of getting rejected for a bank loan as compared to men-owned SMEs.
Many banks and NBFC’s today are taking measures to change this situation for the better. Financial institutions are more willing to lend to women with good credit ratings and stable incomes. They even offer women certain special benefits, which loan-seekers like Swati can avail.
- Lower Interest Rates
Generally what people think about women is that they don’t pay their dues on time. But many studies show and even proved that women are indeed less likely to default on loans than men. So, lenders offer much lower interest rates on home loans to women.
A women borrower enjoys a concession of 0.05% in the interest rate from most banks in India. This concession seems to be very small but values of houses run into lakhs or crores of rupees that means a women buyer can expect significant savings on her repayment. This also makes her monthly installments lighter. To get a lower interest rate, women buyer have to be primary applicant or co-applicant for the loan.
- Tax Advantages
Women borrowers can also be eligible for a tax deduction on the home loan repayments just like male counterparts. Reduction of taxable income by a total Rs. 3.5 lakh through their home loan repayments when it comes to women buyer. Women borrowers applying for a home loan along with their husbands can receive the tax deduction in an equal proportion.
The maximum limit on the interest amount is 1.5 lakh, the remaining Rs 1 lakh is the amount she pays towards paying back the principal amount. This will only apply if she lives in the house herself.
- Stamp duty for house registration
There are many states in India which offer a lower stamp duty for house registrations done in the name of a woman. They do this to incentivize property ownership by women. A lower stamp duty also boosts borrowings by women. Stamp duty charges may be 1-2% lower than they are for men. Considering the property value is in lakhs/crores, this can be a substantial amount of saving.
1-2% concession is generally applicable. So, if a property worth Rs 60 lakh, a woman borrower can save around Rs 60,000-1,20,000.
- Special schemes
Special schemes are offered by many institutions to encourage women to come forward to take home loans for their better future. There are even many financial institutions that sometimes offer special schemes on home loans to women.
For example- Such institutions offer gold vouchers to female homeowners. Paltry as they may seem, such schemes can help women to take a step towards financial independence and also make them aware about the loan benefits.
- The bottom line
As a woman, she can avail all of these benefits. This, of course, depends on certain criteria like a stable income and impeccable credit history-just like any other borrower. In addition, there are many benefits she-and hoards of other women can avail like lower stamp duty charges. So, yes, women must buy homes when they are ready- with the help of a home loan.